An extremist, not a fanatic

December 04, 2007

Ending the arms races

Today, I'm going to do something almost unprecedented in the history of blogging - something so outrageous it'll exclude me from alldecentsociety.Yes. I'm going to speak up for Madeleine Bunting. Her main point here is reasonable - at an aggregate level, high economic activity seems to coincide with indifferent subjective well-being, as Richard Easterlin, Robert Frank and Robert E. Lane, among others, have shown.There are many theories about why, and I don't think Maddy hits the best one - that a number of arms race-type behaviours cause us to work and spend more than we'd like, just to keep up with others; this is a redqueen effect. For example:1. If one person works long hours in order to signal his commitment to his firm, in the hope of winning promotion, others hoping for promotion work long hours too, thus diluting the signal of commitment. The result is that everyone works longer than they'd otherwise like, for little purpose.2. If others buy big 4X4s, we do too (pdf), to avoid being killed when one of them hits us. 3. Some goods - smart suits, bling, flash cars, expensively enhanced girlfriends - are status symbols. If our comparators buy them, we have to too. These mechanisms can lead individually rational people to work harder and spend more than they'd like. The upshot is a society which is rich in aggregate, but unhappy. What's the solution? Here, Maddy leaps to quickly to the need for state intervention. An alternative is a campaign of persuasion, to change people's perceived costs and benefits. We could point out that becoming boss or partner is no mark of excellence, but merely of the ability to jump through hoops like a trained dog. Being boss doesn't make you much happier, but merely exchanges one set of hassles for another. The good opinion of other people just doesn't matter. And there are satisfying alternatives to the scrabble to get ahead: quiet contemplation or the pursuit of excellence (or mere competence) in music or the arts. Those of us who have downshifted are generally happier out of the rat race. And then the media could counter the pretence that mere trinkets and baubles of frivolous utility are the secret of happiness.And herein lies the problem. The MSM is inherently incapable of doing all this, and not just because it's obvious that its profits rest upon adverts that conflate happiness with consumption. The whole culture of the media is one which prizes appearance over genuine merit, and "senior people" over the genuinely excellent. Rather than challenge the sub-optimal equilibrium of wealth and dissatisfaction, the MSM actually helps sustain it. In this sense, Maddy is part of the problem.

This is what psychologists (or Festinger anyway) call social comaprison theory. In essence it's not absolute status that makes us happy, but relative inequality that makes us unhappy. It's at least partly based on implicit learning and early imprinting, so unlikely that people could be educated to ignore it. Government and business have a huge interest in maintaining it as it's the principle worker motivation in capitalist structures. The orthodox alternative is Marxism, all equally poor, so all equally (un)happy.

Some versions of this argument I dislike; they smack of academics / self righteous types wanting to feel good about themselves by characterizing Porsche owning stock brokers as shallow, status obsessed people. I think this downplays the simple direct pleasure some people get from owning Porsches.

I don't deny the importance of relative judgments and peer effects, I just prefer a more generous interpretation. I think people tend to ask themselves "how satisfied am I with my life? - am I doing as well as could be expected?" so comparisons with other people help us form realistic expectations about our own lives.

This by no means implies that "as I as rich as them?" is the only or most important dimension of our self-evaluations, relative to our peer groups, and I am rather puzzled why some people whom I'd expect not to do with judge themselves by what car they drive using this to explain the behavior of other people.

O'Carolan? Are you mostly using the DADGAD tuning or that Irish 'open C'? Richard Thompson's DADGAD version of 'Banish Misfortune' is well worth learning (not O'Carolan, but one that fits the 'harp music played on an axe' hole very well.

Back to your post. At the risk of sounding like a troll, are you arguing for a change in culture?

Another reason high aggregate economic activity may not be associated with increases in subjective well-being:

The larger the per capita GDP, the more of it is proportionally made up of broken window effects, tolls to privileged gatekeepers, and higher "tail to tooth" ratios.

Leopold Kohr observed that the taller a skyscraper, the greater the percentage of floor space taken up by stairwells, elevator shafts, ducts, etc. If it gets high enough, additional floors will add no net floor space at all.

And according to Ivan Illich, "radical monopolies" raise the threshold of subsistence and make comfortable poverty less feasible: things like subsidized professional licensing, housing "safety" codes that outlaw self-built structures, and similar monopolies, all erect "entry barriers" for people who want to translate their own skills into use-value. Subsidies to sprawl and monoculture suburbs force people to be dependent on cars, whereas someone living in affordable housing within easy walking or bike distance of work and shopping would have a better quality of life with much lower expenses.